This guy reminds me more and more of “Tricky Dick” Nixon…
Republican presidential nominee Mitt Romney used a loophole to “rent” the Mormon church’s tax exemption status and defer paying taxes for 15 years, according to a new report.
Tax returns obtained by Bloomberg News through a Freedom of Information Act request indicated that Romney set up a charitable remainder unitrust (CRUT) in June 1996 just before Congress cracked down on the loophole in 1997.
“In this instance, Romney used the tax-exempt status of a charity — the Mormon Church, according to a 2007 filing — to defer taxes for more than 15 years,” Bloomberg’s Jesse Drucker explained. “At the same time he is benefitting, the trust will probably leave the church with less than what current law requires.”
Estates lawyer Jonathan Blattmachr told Bloomberg that Romney’s trust benefits from the Mormon church’s exempt status because charities don’t pay capital gains taxes when they make a profit from the sale of assets.
“The main benefit from a charitable remainder trust is the renting from your favorite charity of its exemption from taxation,” Blattmachr said, adding that the charitable contribution “is just a throwaway” and the church would receive little if any financial benefit from the trust.
“I used to structure them so the value dedicated to charity was as close to zero as possible without being zero,” he pointed out.
The CRUT allows individuals to “defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments,” Drucker wrote. “Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity.”
In fact, the amount available to go to the Mormon church has decreased from at least $750,000 in 2001 to $421,203 at the end of 2011 as Romney has collected yearly cash payments from the trust.
The Romney campaign declined to answer questions about the trust but insisted that it was “operated in accordance with the law” in an email to Bloomberg.
- Romney Avoids Taxes via Loophole Cutting Mormon Donations (democraticunderground.com)
- Bloomberg News: Romney ‘rented’ Mormon church’s exemption to defer taxes for 15 years (rawstory.com)
- Mitt Romney Reportedly Avoids Taxes Through Mormon Church Trust (huffingtonpost.com)
- If There’s A Tax Loophole, Mitt Romney is Using it (crooksandliars.com)
- Romney Avoids Taxes via Loophole Cutting Mormon Donations – Bloomberg (bloomberg.com)
- Romney avoids taxes via loophole cutting Mormon donations (thesunnews.typepad.com)
- Romney’s trust for Mormon Church donations defers some taxes (washingtonpost.com)
- Romney’s Not-So-Charitable Tax Shelter (theatlanticwire.com)
- ‘Cease And Desist, Brother Twede’: Mormon Criticizing Romney Threatened With Excommunication (addictinginfo.org)
- - Romney was a Draft Dodger (freedomportal.net)